PSE index slumps on SMIC equity deal

pse.com.ph photo

MANILA—Most Philippine stock prices fell sharply on Friday as a $150-million equity deal by the country’s most valuable company, SM Investments Corp., dragged down the main index and sapped liquidity in the market.

The main-share Philippine Stock Exchange index slumped by 127.49 points or 1.91 percent to 6,533.95 while elsewhere in the region, stock markets gained on favorable US economic data. For the week, the PSEi lost a total of 229.67 points or 3.4 percent.

Analysts said the catalyst for the day was the $150-million equity deal by SM Investments priced at P900 per share, which represented a 6.4 percent discount from Thursday’s closing of P961.50 per share.

A stocks analyst from a foreign firm said apart from the discounted pricing, such new issuances tend to mop up market liquidity, which was already thinning as the “ghost month” was drawing near. Top-up placements also tend to signal to investors that valuations are toppish, the analyst said.

SMIC, the most actively traded stock on the market and the biggest lagger among PSEi stocks, fell by 8.58 percent to close at P879 per share.

Other big index laggers for the day were SM Prime (-5.57 percent) and Bloomberry (-5.24 percent) while ALI, Meralco and AGI all fell by over 3 percent.  Philex, Megaworld and SMC slipped by over 2 percent. Semirara was down by 1.54 percent.

The day’s PSEi decline was tempered by  gains eked out by PLDT (+1.18 percent) and Metrobank (+0.19 percent).

All counters were in the red but the steepest decline was posted by the holding firms (-3.39 percent) and property (-3.11 percent) sub-indices.

Turnover swelled to P14.98 billion for the day due to the $150-million equity placement in SMIC.

There were nearly four times as many decliners for every single gainer on the market.

Meanwhile, regional peers were mostly higher following a report that the Institute for Supply Management’s purchasing managers’ index had risen at a faster pace than expected in July, boosting hopes that US recovery was gaining traction.